The big five chartered banks have been exiting downtown cores of major Canadian
cities for years.

Many small communities, have no banks or credit unions at all.

Moreover, fees are an issue. Only thirty years ago, banks did not charge fees
but now these charges are amongst the highest in the world.

“Fringe” financial institutions like Money Mart and the Cash Store have stepped
in to fill the void and make big bucks while charging exorbitant fees.

There is some regulation of these fringe institutions. In 2008, for example,
the Ontario government, concerned about excessive charges, brought in
regulations. These controls were inadequate so the government is in the process of setting
new rules.

Meanwhile many Canadians don’t have bank accounts.

The solution to this problem (and others) is to bring back postal banking.

Canadians had access to Postal Banking for more than one hundred years. When
the Post Office Savings Bank ceased operations in 1968, nearly 300,000 accounts
closed down. At its peak in 1908, deposits in the bank totalled 47.5 million
(equivalent to $1 billion in today’s money). Meanwhile postal banking is
thriving in other parts of the world. Japan Post Bank, for example, has $2
trillion in assets.

The government is currently conducting a public review of Canada Post, Postal
banking is an idea whose time has come again.